Compliance Activities and Policy

Preface

In the current changing global business environment, Clarion GB Ltd. has recognized the requirement of companies to maintain high ethical standards and an increased sense of social responsibility.

In recognizing these changing environments, in October 1997, Clarion GB Ltd., set up their “Corporate Philosophy” to be the cornerstone of the company management. In brief, the Philosophy requires that business activities of the company must always maintain good relationships with the various stakeholders of Clarion, such as customers, shareholders, business partners and employees. In addition, the Philosophy requires that Clarion establish a global Corporate Governance System.

This means that each individual employee shall not merely maintain public order, but must conduct him or herself with good faith, having our Corporate Philosophy in mind. Employees must also have a sincere sense of value and ethical standards required of him or her not only as a good member of Clarion, but also of society.

On July 1, 2003, Clarion GB Ltd., established a Compliance Program to put our “Corporate Philosophy”, which has been the basic concept for our activities for a long time, into practice. At the same time, Clarion established this Guiding Principles of Conducts and Behaviours (herein after called “the Principle”) as a means to describe and carry out the basic foundations for our responsibility to the society and corporate morals. The following document, Guiding Principles of Conduct and Behaviours, will apply to all employees of Clarion GB Limited.

（24th May 2004）

1. General Rules

1) Observance of the Social Criteria

We shall not only observe laws, rules and regulations, but also respect social criteria, and conduct ourselves with appropriate business sense.

An employee handbook and policies - as displayed on Achiever covering current legislation and guidelines.

2. Relationship with the Society

(1) Contribution to the Society

We shall, as members of a corporate citizenship, actively take part in activities to help better society and contribute to its well-being and improvement.

Contributions are and have been made to various charities throughout the year - and we encourage and support staff in their contributions to society.

(2) Observance of Business Related Laws, Rules and Regulations

We shall behave and observe local laws, rules and regulations related to our products and services.

(3) Observance of Laws and Regulations related to General and Political Contributions and Donations

We shall observe local laws and regulations, when making political and other contributions and donations to various organizations.

(4) Breaking off Relationships with Groups and Organizations with Anti-Social Beliefs and Activities

We shall deal with fortitude with groups and organizations whose beliefs and activities are hostile or disruptive to the established social order and avoid any relationship with them.

(5) Protection and Preservation of Environment

In order to maintain a sound relationship with the environment, we shall be aware of the importance of protection and preservation of nature at all time in corporate activities such as research, development, manufacturing, sale and disposal of our products. We shall engage in environmental-friendly manufacturing activities complying with related environmental treaties, laws and regulations.

We shall, at all times, be aware of the nature of our products and safety requirements related to them. We shall observe laws and regulations related to product safety standards and strive to always create safe products.

The objective of this procedure is to ensure the company's activities are carried out in accordance with sub-clause 4.3.2 of the ISO14001 standard.

(3) Observance of the Anti-Monopoly Law

We shall, under no circumstances, make breaches to Anti-Monopoly Laws through cartels, illegal conferences, forcing re-sale prices or abuses of a superior business position. We shall engage ourselves in fair and free trade competitions.

We shall, under no circumstances, illegitimately or illegally obtain trade secrets from other companies nor shall we misappropriate legitimately learned trade secrets.

(6) Observance of Reasonable Limits to Entertainment and Presents

We shall not entertain or give presents to, nor receive entertainment or presents from customers or business partners beyond reasonable limits socially accepted.

This concurs with our existing policy

(7) Keeping Moderate Relationship with Public Service Personnel

We shall not entertain or give presents to government agents, public service personnel, officers or local public organizations either domestically or overseas where the law may prohibit this act.

(8) Verification of Appropriate Advertisements

We shall, at all times, use fair and proper expressions in advertisements, and verify, based on facts, the appropriateness of all advertisements.

Recruitment Policy in place (advertising with regards recruitment) - as displayed on Achiever (PP03-9 dated 12/05/04)

4. Relationship with Shareholders and Investors

(1) Disclosure of Management Information

We shall disclose management information on our operations and financial situations to shareholders and investors in an accurate and timely manner. We shall convey our Corporate Philosophy and Management Policies to them clearly and definitely. We shall listen to comments and criticisms against the information disclosed in a sincere manner.

(2) Prohibition of Insider Transactions

We shall make no transactions of securities based on internal confidential information from ourselves, our affiliates or trading partners in the course of business activities, nor will we make transactions of securities of the related companies before such confidential information becomes publicly known, officially.

5. Relationship with Employees

(1) Respecting Human Rights and Equality

We shall, at all times, maintain a sound working environment, and respect human rights, equality and personality of each individual.

Equal Opportunities training delivered to all management in November 02. Communication ongoing

(3) Protection of Personal Information

We shall, at all times, strictly control the confidentiality of personal information of the employees and other outside personnel and the information that we come to possess in the course of our business activities.

We shall make rigid distinction between company and private matters, and shall at no time bring personal interests into, or take company matters out of work.

Employee Handbook as displayed on Achiever (Section 5.15 Other Information)

6. Relationship with Company and Company Properties

(1) Observance of Company Rules and Standards

We shall, at all times, observe company regulations and standards.

As per the Employee Handbook - as displayed on Achiever (CFEN-5GQKUX dated 08/09/03) and all other policies and procedures on Achiever

(2) Following Proper Accounting Procedures

We shall follow proper accounting procedures complying with related laws, regulations, internal rules and standards in order to establish an effective internal cross-check system as well as to comply with external requirements.

External auditors - audit these procedures on an annual basis

Internal auditors may audit this procedure CGB:S4.04 dated 09/06/03

(3) Prohibition of Activities with Conflicting Interests

We shall, at no time, engage ourselves in activities that compete with or conflict with our company’s business.

Total quality management and company procedures

(4) Prohibition of Political and Religious Activities

We shall, at no time, engage ourselves in political and religious activities inside company premises.

(5) Control of Confidential Business Information

We shall, at all times, control confidential business information in an appropriate manner, and in no case, disclose this information to the outside without prior permission from the company.

Employee Handbook as displayed on Achiever (Section 5.15 Other Information)

(6) Proper Administration and Deployment of Company Properties

We shall, at all times, maintain company property in safe working order and properly deploy these assets. Also, in no case shall we misappropriate them for personal purposes.

Total quality management of all company procedures

(7) Proper Use of Information Systems

We shall use the company information system only for business purposes, not for the private purposes.

General company policies and handbook as displayed on Achiever

(8) Proper Administration of Documents and Records

We shall, at all times, administrate documents, records and other information in a proper manner, always maintaining an understanding of their importance.

We shall, at all times, protect intellectual property rights, acknowledging them as important assets.

7. Additional Rules

(1) Scope of Application of the Principle

This Principle is applied in full to all employees of Clarion GB Limited as a subsidiary of Clarion Co. Ltd. It also applies to the personnel assigned to Clarion under contracts from other companies and to part time workers, where applicable.

(2) Modifications and Abolition of the Principle

This Principle shall be modified or abolished only after the approval at the Clarion Co. Ltd. Board of Directors Meeting.

(3) Consultations and Reports

1) In the event questions arise regarding the content and/or interpretations of the Principle, inquiries shall be addressed to the department administering affairs of compliance at Clarion Co. Ltd.

2) In the event of a violation or threat of violation to the Principle, whether by individuals or groups, employees or outsiders, the individual discovering the violation (“Reporter”) shall report their facts to their departmental supervisor. It is the responsibility of the supervisor to insure that the facts are reported to a senior executive of the company. The Reporter may also report directly to the department administering affairs of compliance.

3) The Reporter, as defined under the preceding clause, shall be protected from any disadvantageous treatment(s) due to the act of reporting.

4) Penal Rules

Anyone in violation of the Principle shall be penalized in accordance with company regulations in force at that time.